If you're waiting for the right moment to check your health insurance bill, this week is it. From 1 April, Australian health funds are applying an average premium increase of 4.41 per cent, the largest jump since 2017. For a family on an average gold hospital policy, that translates to about $330 extra per year. But here's what matters right now: you have until 31 March to stop it.
The increase reflects real pressures on the system. Healthcare costs rose 5 per cent last financial year, driven by Australians living longer, surging demand for private mental health services since the pandemic, and healthcare workers earning more because shortages are pushing wages higher. These are legitimate cost drivers. But just because the increase is justified doesn't mean you have to wear it.
The simplest move is the one most people haven't heard about. If you prepay your annual premium before the 31 March deadline, you lock in today's rate and avoid the hike entirely. A family paying around $2,641 annually could save $116 straight away. But the real winners are gold policyholders shopping around: those who switch from an average-priced gold policy to the cheapest available option could save $1,387 per year. Even switching within your current fund sometimes works.
Not all funds are hitting policyholders equally. GMHBA has the lowest increase at 1.98 per cent, while HCF customers with gold policies are facing increases of up to 25 per cent. That disparity is creating a perverse incentive: families are voting with their feet, switching funds or downgrading their cover. Since the pandemic, the number of gold-tier policies has dropped by 360,000, despite overall policy numbers growing. Members are making trade-offs they may regret.
Before you downgrade, think it through. If you're only paying attention to the premium, you might move to a cheaper silver or bronze policy without noticing the deductible has doubled or your specialist cover has vanished. A lower premium often comes with higher out-of-pocket costs when you actually need care. The question isn't just "What's my premium now?" It's "Will I still be covered for the things I actually use?"
CHOICE recommends reviewing what your current policy actually covers. Removing extras you don't use—pregnancy cover if you're not planning more children, orthodontics if your kids are grown, physio if you never claim—can trim serious money off without downgrading your hospital cover. Increasing your excess also reduces premiums. A 1 in 8 survey found that 16 per cent of members prepay their annual premium upfront to avoid the hike, and some funds are offering sign-up bonuses to new members who switch in March.
The harder truth is that health insurance is becoming unaffordable for ordinary Australians. The government says it's providing $7.9 billion this year through the private health rebate to help, but the rebate hasn't kept up with premium rises. National Seniors Australia has flagged the risk that comprehensive cover could eventually move beyond the reach of most households. That's a policy problem the government will need to answer in the medium term.
But this week, your problem is more immediate. Spend 20 minutes comparing your current fund against competitors. Check what your policy actually covers. Work out whether prepaying now makes sense for your situation. The deadline is in four days, and this is one of the few moments where a small decision today can save you hundreds by Easter.